Fri, Sep 23, 2011
Analysts Say The Acquistion Is 'Not A Surprise'
We hear a lot about mergerers and acquisitions in the aviation
industry, but this is comparable to Goliath gobbling up Goliath.
United Technologies said late Wednesday it has struck a deal to
acquire Goodrich at a 16% premium to the stock's latest close.
United Technologies said it is paying $127.50 per share in cash
to buy Goodrich. The deal totals $18.4 billion, including $1.9
billion in net debt. United Technologies said it expects finance
the deal with debt and equity issuance, with the equity component
likely 25% of the total. Shares of Goodrich finished Wednesday's
session at $109.49 and traded around $122 at 2000 ET before the
deal was officially announced.
United Technologies is an industrial systems and aerospace giant
with a market cap around $68 billion. The company manufactures
everything from elevators and escalators to helicopters and fuel
cells. Goodrich is primarily an aerospace company and manufactures
aircraft landing systems and electronic systems.
United Technologies expects the transaction will be accretive to
earnings in the second year. United Technologies also reaffirmed
its expectations for 2011 revenues of approximately $58 billion,
earnings per share in the range of $5.35 to $5.45.
Analysts say the deal announcement is not a surprise, after the
Financial Times reported earlier this week that United
Technologies would spend about $15 billion to buy Goodrich.
"Goodrich delivers on all of our acquisition criteria. It is
strategic to our core, has great technology and people, and
strengthens our position in growth markets,” said United
Technologies Chairman and Chief Executive Officer Louis
Chênevert. “We are very excited to bring the
capabilities of two great companies together, making us more
competitive and better able to provide value to both customers and
shareholders.”
“We are extremely pleased to have an agreement with United
Technologies that delivers immediate cash value to our shareholders
at a premium that reflects the strength of our business,”
said Marshall Larsen, Chairman, President and Chief Executive
Officer of Goodrich. “Our combination with United
Technologies is a testament to our employees and will enable us to
shape the future of aerospace through continued innovation,
increased global scale and the best talent in the industry.
Importantly, United Technologies has a similar culture of mutual
trust and respect, accountability and teamwork. Goodrich’s
long and proud history will enter a new chapter as part of United
Technologies.”
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